UK cereal demand from processors drops to 20-year low in 2025/26

UK human and industrial cereal demand is forecast to fall to a 20-year low in 2025/26, according to AHDB’s latest supply and demand estimates, pointing to weaker domestic outlets for grain this season.

The levy organisation’s second official UK cereal balance sheet for 2025/26 shows that while animal feed demand is expected to remain broadly steady, human and industrial (H&I) usage is projected to decline sharply amid pressure in several key end markets.

Compared with estimates released in November, total H&I cereal demand has been revised down by 139,000 tonnes to 9.17 million tonnes. This is 1.315 million tonnes lower than in 2024/25.

For growers, the figures highlight reduced demand from domestic processors, although this is offset to some extent by a tighter overall supply position.

AHDB analysts say the fall in H&I demand is being driven by three main factors: the loss of bioethanol demand, subdued activity in the brewing, malting and distilling (BMD) sector, and weaker consumer demand linked to cost-of-living pressures.

Bioethanol demand has been hit particularly hard. Vivergo ceased operations in August last year following what was described as “incredibly tough operating conditions” for the sector.

Ensus, the UK’s other major bioethanol plant, has remained offline since its scheduled maintenance shutdown in September.

AHDB assumes Ensus will remain offline for the remainder of the season unless ongoing discussions with government around support for the sector lead to a change.

Demand from the BMD sector is also described as very subdued, particularly for barley.

Latest AHDB estimates put H&I barley usage at 1.584 million tonnes, down 84,000 tonnes from November’s forecast and 214,000 tonnes lower than last season. This would be the lowest level recorded since digital records began in 1990/91.

The further downward revision reflects actual usage data seen so far this season, which AHDB says has fallen more sharply than previously anticipated.

Analysts at the levy body point to pressure on the BMD sector from reduced consumer spending, changing drinking habits and rising costs. There have also been reports of distilleries being mothballed, while global challenges in the sector are limiting export opportunities.

By contrast, total animal feed demand for cereals is expected to remain relatively stable, although there have been notable shifts between livestock sectors and grain types.

Compound feed demand has been revised lower since November, largely due to sharper falls in pig feed and poultry feed production.

Cattle feed demand has remained firm so far, but AHDB expects this to ease as turnout approaches, particularly given the current situation within the dairy herd.

There are more positive signals from the poultry sector, with integrated poultry units now expected to see stronger growth than previously forecast. Animal feed demand in Northern Ireland is also expected to remain buoyant.

In terms of grain usage, AHDB says wheat and barley are forecast to make up a larger share of feed rations this season, while maize use has been revised down. A similar pattern has been observed in Northern Ireland, where wheat has displaced maize in rations so far.

Trade flows are also adjusting as domestic availability and demand change.

AHDB forecasts that imports of both wheat and maize will return to more typical levels following record volumes last season. Wheat imports are estimated at 2.20 million tonnes, unchanged from November’s estimate but down 28% year on year.

The levy body says the strong quality of the domestic milling wheat crop has reduced reliance on imported wheat in grists.

Maize imports are now expected to total 2.17 million tonnes, down 114,000 tonnes from November’s estimate and 30% lower than last season. The loss of bioethanol demand, combined with competitively priced domestic feed grains, has driven the reduction.

This is the first AHDB balance sheet of the season to include export and closing stock projections for wheat and barley.

Wheat exports are estimated at 170,000 tonnes, reflecting the pace of shipments to date. Barley exports are forecast at 450,000 tonnes, down 36% on the year, with export demand expected to remain subdued.

Despite the fall in domestic demand, a sharper reduction in total supply means the overall cereals balance sheet is tighter than might otherwise be expected.

Commercial end-season stocks for total cereals are forecast by AHDB at 3.576 million tonnes, just above the long-term average.

Wheat ending stocks are pegged at 2.048 million tonnes, broadly in line with last season, while barley stocks are expected to stand at 1.268 million tonnes, also similar year on year.

AHDB says attention will now turn to whether animal feed demand shifts later in the season, whether bioethanol demand re-emerges, and whether maize becomes more competitive, potentially pushing wheat back out of rations.

For now, the analysis suggests the UK is likely to carry relatively average cereal stocks into the next season, with market direction sensitive to changes in feed demand and trade flows rather than a recovery in human and industrial usage.